City to investigate 'serious' parks issues

Starkville representatives are calling for the creation of a task force to investigate budgeting anomalies discovered in Starkville Parks Commission's Fiscal Year 2012.

A Watkins, Ward and Stafford audit released Thursday revealed three major budgeting issues associated with the autonomous group, including the fact SPC Chairman Dan Moreland issued an unauthorized cashier's check to help pay the department's J.L. King Splash Pad construction bill.

The firm did issue a clean, unqualified opinion - all finances were accounted for, and no money was missing from the budget - but CPA Randy Scrivner said three findings indicate serious issues involving inadequate policies and procedures to monitor internal budgets of capital improvement projects, the issuance of payments without commission approval and budget overages on numerous SPC line items.

No state statutes were broken, Scrivner said Thursday, but new SPC Board policies need to be in place to prevent these issues from reoccurring.

Two of the three findings dealt with the development of the splash pad at J.L. King Park, which was one of the first major capital projects by SPC.

Moreland is the sole GOP candidate for Starkville's mayoral race.

Parks audit findings will be included in the City of Starkville's full audit, which will be presented soon to the Starkville Board of Aldermen. SPC's budget includes streams funded by city revenues, 2 percent food and beverage tax returns and private donations.

City officials said Friday and Saturday a period of SPC budgeting investigation needs to begin so aldermen have a true understanding of what happened with city finances and why.

The city is taking the audit's findings very seriously, said Starkville Mayor Parker Wiseman.

"I think it makes sense with a matter like this, since it is very serious, to go through an investigative period, whether that be the board as a whole, a committee or taskforce the board establishes," Wiseman said Friday. "The first part of the process is to learn everything that we can possibly learn about what went wrong. That hopefully will make it clearly how we address the issue going forward so that something like this never happens again."

A copy of the $35,000 cashier's check was obtained by the Dispatch and shows payment was directed to Couvillion Design+Build, a Starkville-based firm which handled the splash pad's construction. Moreland confirmed Thursday he and a SPC administrative assistant provided the two signatures needed for the check - the one restriction needed for a Parks official to obtain the money. The money came out of a private Coca-Cola donation to SPC.

Moreland's actions came without SPC Board approval, the audit stated, and he said the money was used to pay Couvillion after the business demanded money owed to it.

Moreland said Thursday the city had not released money to pay the firm by Oct. 1, but Freedom of Information Act requests made by the Dispatch show SPC filed three invoices from late September to the end of October.

Documents show Couvillion submitted claims to SPC on Oct. 10, the unauthorized check was commissioned Oct. 17 and SPC filed its October work claims to the city on the last day of the month.

A Sept. 27 invoice requested a $31,600 payment to Couvillion, but only $22,248 could be paid because SPC hit the limit of its Starkville Board of Aldermen-approved, $120,000 splash pad budget. The two October claims were not submitted to the city until Oct. 31 after that month's board of aldermen meetings, documents show.

In order for the city to pay a bill, they must be placed on the claims docket and approved by aldermen. The two October claims - a $66,800 work request and a $51,793.03 final balance payment - were approved during aldermen's first November meeting and paid shortly after.

Both payments were made with SPC's FY 2013 parks improvements and capital projects fund, a yearly $180,000 allotment from the city's 2 percent tax returns.

A Friday FOIA request of this fiscal year's parks improvements fund shows SPC has used $175,954.62 of the $180,000 budget since October, the start of FY 2013.

"I've reviewed the city file, and what is clear to me from that review and conversations with our city staff is that two invoices were submitted on Oct. 31 from the Parks Commission to the city. One of those invoices had been submitted by the contractor to Parks three weeks earlier; the other had been submitted on Oct. 30. Our staff had no knowledge that $35,000 had previously been paid by the unauthorized check, which was not included in those two invoices. $35,000 had been previously expended, but the information we received did not reflect that," Wiseman said. "No one on our staff had any knowledge that a $35,000 payment had been made by Parks, therefore those invoices should have been $35,000 less than what they were. Those invoices were not true and accurate invoices as submitted by Parks. That's a significant issue.

"A government official issuing public funds without authorization is a very troublesome matter. Even though in this case the funds that were issued by the Parks Commission chair without legal authority were not city funds, it is of substantial city interest because of the oversight that the Parks Commission has of more than a $1 million of city tax funds each year," he added. "Once we have notice that an action of this nature has occurred in an organization that has city funds at its disposal, we must ensure that proper controls are in place so that it doesn't occur again."

Moreland said he felt like he was doing the right thing to ensure payment was made to a local company so its employees could receive their paychecks.

But, hypothetically, what if Wiseman procured city money in the same fashion as Moreland without board authorization? Ward 5 Alderman Jeremiah Dumas says the political fallout would be monumental.

"There are huge political ramifications for city references (taking and spending money in an unauthorized manner). It would be a considerable issue from sitting board members," Dumas said. "I would not sit there on that board and allow that type of activity to happen. There would be devastating conversations from the board table if there's even $1,000, much less than $35,000, taken without authorization."

Dumas took issue with Moreland laying blame at the city's doorsteps.

"He wrote the check," Dumas said. "I want to be represented by someone who can shoulder the blame and respond correctly if they do this. I have a real issue with him to pass it off on us when, in fact, just look at what actually happened."

Adding to the political intrigue is the upcoming municipal election. Moreland, a Republican, is running for mayor. Wiseman, a Democrat, is running for reelection.

While the finger pointing begins, the fact remains that SPC's $180,000 FY 2013 parks improvements fund is nearly exhausted with seven months left in the fiscal year.

"Virtually no additional improvement work can be done using those appropriate funds from now until the end of September. That's a significant issue," Wiseman said. "They do have other resources: their operational budget and donations account. But since $118,000 was used to complete (the splash pad project), those resources that would be used on these 2013 projects have greatly been depleted."

Dumas said SPC's general line item overages and the commission's guidance of the splash pad project could show "symptoms of greater management problems."

"I'm afraid that's what these symptoms are showing. They may not be, but they could," he said. "I think investigation by an independent task force will be good to see what's happening because fact that we entrust 40 percent of our two-percent taxes to an organization responsible for its own autonomy, its own budget. And the key factor is we're in a time frame within a couple years where we'll have to prove to the Mississippi Legislature to reauthorize two-percent money. This type of activity is not the type you want exposed when they look to us to be good stewards of public tax money.

"There are election issues here, too." Dumas added. "We need to get to the bottom of this so people fully understand what happened at the Parks Commission."

A city task force is expected to consist of a finance person, someone familiar with SPC operations and a board of aldermen representative, officials said. The group is also expected to work with legal counsel, accountants, auditors and SPC administration and employees.

"Not only would I like to look at the information, but I'd also like to consult with park stakeholders," Ward 2 Alderman Sandra Sistrunk said. "I'd like a full and open opportunity to discuss Parks operations and how it impacts our budgeting processes."

Sistunk is the former chairman for the city's budgeting committee. She still serves with the group.

What are the city's options moving forward? Sistrunk said the board's range of action goes from doing nothing - highly unlikely - or considering removing commissioners. Dumas said he's not against considering whether Parks and Recreation should remain an autonomous commission.

"We need to act promptly and as strongly as necessary. As the board of aldermen, we ultimately are the ones responsible for tax dollars," Dumas said. "I have no problems whatsoever taking the appropriate action. We could go through a process and look at individual commissioners to make sure they are deemed fit to sit on the commission if this is a symptom of management issues. Everything is on the table."

"As someone who likes to make decisions on information and not emotions, someone who is deliberate in their actions, I want to see more information first," Sistrunk said. "I think it's important to have that information. The best course of action is to task people who have an understanding of Parks and city operations, but at the same time who don't have a political interest to look after."

A call to Ward 3 Alderman Eric Parker, the board liaison to SPC, was not returned as of press time Saturday night.

Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch